According to a study from independent market analyst, Datamonitor, entitled Streamlining production, manufacturers in batch, process and discrete industries are turning to technology such as supply chain management (SCM) to support these strategies with increasing vigour.

Manufacturers are finding that their supply chains are becoming increasingly complex, and are having a greater impact on their overall business, says Adam Jura, manufacturing technology analyst at Datamonitor and author of the study.

Gone are the days of comparing two manufacturing companies. Now, it is a case of two supply chains, and as such, the capabilities of modern SCM suites to streamline processes associated with both partners and customers are driving significant investment.

Similarly, vendors are finally offering SCM solutions that fit the needs (and budgets!) of smaller manufacturers looking for similar functionality, yet a much lower cost. These factors are causing continued growth in the SCM market.
 
Business strategies such as lean manufacturing and demand-driven supply chains promise to alleviate some of the business pressures, yet can be difficult to implement. For many, investment in technology such as SCM is the most viable path. Collecting, organising, storing, analysing and using the data from key business metrics allow manufacturers to assess the impact of their implemented strategies and to provide additional functionality.
 
Datamonitor estimates that, by 2010, the worldwide market for SCM applications in the manufacturing industry will grow to $2,5bn, up from $1,6bn in 2005.

According to Datamonitor this growth in revenues will be driven by both SME manufacturers and the larger enterprise manufacturers, as they look to either replace legacy systems or start a new implementation from scratch. Advancing technologies such as RFID that rely upon a solid SCM suite will also drive adoption, as manufacturers seek to improve their overall performance.
 
The Datamonitor SCM forecast model also assesses the investment of sixteen individual manufacturing industries. Over the next few years, the automotive, consumer packaged goods and high-tech and electronic industries will lead investment rankings, with other industries, such as pharmaceutical, close behind.
 
The significant opportunity for vendors within the manufacturing industry is good news. However the problem of effective targeting and communication remains a significant one. Many vendors are failing to fully understand the industry dynamics that their customers operate in, and as such lose out on critical sales. Speaking the same language as manufacturers should be a key focus for vendors as poor understanding can be the difference between success and mediocrity.
 
Jura concludes: Manufacturers will always have a focus on their bottom line as businesses try to maximise revenue without passing on costs to their customers. What makes for interesting reading is the high priority being given to products and really driving revenues. Product differentiation, time to market and post-sales support are major focuses for manufacturers. For many of the associated processes, these companies will be looking to their technology partners for support.